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Technical analysis of EUR/USD for August 04, 2015

Friday's spikes towards 1.1114 ended below 20Dsma at yesterday's session as well the pair rejected at 20Dsma. The pair closed below 20Wsma found at 1.1050.

EURO:

Growth in the Spanish manufacturing sector continued easing in July. The Markit Spain Manufacturing PMI new order growth slowed down to its 17-month low. The seasonally adjusted PMI posted 53.6 in July down from 54.5 in June to signal the slowest improvement in operating conditions since last October.

IMF official: the IMF and Greece has not reached an agreement on a new debt plan yet. Greece and Europe are ready to make the relevant decisions. The IMF officials can only support a comprehensive rescue package for Greece. The IMF Board of Directors authorized to discuss arrangements for a new Greek aid plan next Wednesday.

IMPACT ON USD:

Economic activity in the manufacturing sector expanded in July for the 31st consecutive month, and the overall economy grew for the 74th consecutive month, say the nation's supply executives.

Technical view:

In the four-hour chart, the pair has been trading in an ascending bearish channel, rejected at the upper end of the trendline willing to go further down. In case of a daily close above 1.1130, fresh longs will be added to the system.

Until the pair trades below 1.1000, intraday trade favors selling on a rise. The supply zone remains at higher levels between 1.1085 and 1.1100 50Dsma. Until the price closes below 1.1100, sell on a rise. We had already recommended the same strategy and Friday's session proved that the strategy remains valid in the near term. Monthly support is found at 1.0730.

Intraday resistance is seen at 1.0970, 1.1000, and 1.1030. Support is found at 1.0920, 1.0890, and 1.0850. In case the pair lost 1.0850 selling will accelerate.

Intraday selling is available below 1.0930 with targets at 1.0900, 1.0870, and 1.0850. Risky buying is available above 1.1000 with targets at 1.1030, 1.1050, and 1.1080.

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